Six online DFS operators, including industry leaders DraftKings and Fanduel, are now offering games that will be regulated and taxed by the government. They’ll be joined by DRAFT, Sports Hub, Boom Fantasy,and Fastpick, as DFS moves out of a legally-gray shadows and into the daylight of 100 percent legitimacy.

More Than Just Luck

The new laws came into effect on April 28th, and it will be a seamless transition for players who were already in the game.

“As far as the game participation for the player, they’re really not going to see anything different than they have before. Pennsylvanians who already participate in Fantasy Sports Contests with any of these firms will see no difference in game play nor need to re-register.” – Doug Harbach, Gaming Control Board Spokesman

The move is a clear indication that, unlike many states which consider DFS to be illegal gambling, Pennsylvania lawmakers see it as a game of skill. They’re not alone, with a recent academic study suggesting that all DFS winners have skill.

Daily fantasy sports are similar to the traditional fantasy leagues you may have played with friends or co-workers. However, instead of competing over the course of a full season, the contests are typically completed in a day, or in the case of a sport like golf, over a weekend. Buying into the events is considered an entry fee and not a bet.

The contests have been thriving and expanding in recent years, nearly doubling from 32 million users in 2010 to 59.3 million in 2017. The average DFS player in the U.S. spends about $556 per year, according to the Fantasy Sports Trade Association.

Raking in Revenues

And Pennsylvania will take a healthy cut of those expenditures. DFS operators will be taxed 15 percent on their gross revenues, with the proceeds being funnelled into the state’s general fund. It’s not yet known how much the fantasy games will generate for the state, or if the sites will pass that extra cost onto its players, but the tariff is considerable. Last year, New Jersey slapped a 10.5 percent tariff on revenues when it legalized DFS.

The shift is one of many changes in the works for gaming laws in Pennsylvania. Under the new package approved last year, the state will also regulate online casinos, poker, racing, and online lotteries, while also licensing several new satellite casinos. Should the US Supreme Court lift the ban on sports betting outside of Nevada, lawmakers in the Keystone State are expected to regulate that, too.

While we don’t know exactly how much DFS will generate for the state, the gambling expansion as a whole is expected to pump some $200 million in annual revenues into their coffers.